Govt deposits Rs 92 cr to clear immediate dues of MTNL
NEW DELHI: The government has stepped in to make a Rs 92 crore payment towards bond dues of MTNL, a government source said, adding that another Rs 64 crore would also be paid in coming days towards interest obligations that are slated to become due in August.
The helping hand from the government is significant as it averts a crisis-like situation for the telecom corporation which has been teetering on the brink with regard to its debt obligations, particularly in this case government-guaranteed bonds. Last week, the debt-laden firm had expressed its inability to make interest payments to certain bondholders due to paucity of funds.
The government sources said Rs 92 crore is being deposited in an escrow account for payment towards interest on bond dues. Another Rs 64 crore would be paid later this month to clear interest dues that slated to come up in August, sources said.
The second semi-annual interest (7.59 per cent) on certain bonds is falling due on July 20, 2024. Amid mounting financial woes, Mahanagar Telephone Nigam Ltd (MTNL) last week informed in a statutory filing that it is unable to make interest payments to certain bondholders “due to insufficient funds”.
“The second semi-annual interest with regard to 7.59 per cent MTNL’s bond series...is due on July 20, 2024. As per the structured payment mechanism of Tripartite agreement signed among MTNL, Department of Telecom and Beacon Trusteeship, MTNL has to fund the semi-annual interest into the Escrow account with adequate amount 10 days before the due date,” MTNL had said in a BSE filing on July 11. MTNL had informed that in the wake of provisions of TPA, and due to insufficient funds, it could not fund the escrow account with an adequate amount.
MTNL, which offers telecom services in Delhi and Mumbai, has seen a steady erosion in its subscriber base over the past years